German jobless spike held down by government salary programme

By: |
September 1, 2020 4:09 PM

Germany's unemployment rate edged up to 6.4 per cent last month but, as in July, the coronavirus pandemic played no significant role in the increase, the national labor agency said.

After clocking 23.5% in April and May, the overall pan-India unemployment rate first dropped to 17.51% in the first week of June and then it took a steeper fall to 11.6% in the second week.The unadjusted jobless rate, the headline rate in Germany, was up from 6.3 per cent in July.

Germany’s unemployment rate edged up to 6.4 per cent last month but, as in July, the coronavirus pandemic played no significant role in the increase, the national labor agency said on Tuesday. Jobless figures in Europe’s biggest economy have been kept down by extensive use of a short-term salary support programme. The unadjusted jobless rate, the headline rate in Germany, was up from 6.3 per cent in July, the Federal Labour Agency said.

That rate stood at 5 per cent in March, the last month before the impact of the pandemic was reflected in unemployment figures. The number of people registered as unemployed was 2.955 million, an increase of 45,000 compared with the previous month, and 636,000 compared with a year earlier.

In seasonally adjusted terms, the unemployment rate was static at 6.4 per cent. Rises in unemployment in Germany and elsewhere in Europe have been moderate by international standards because employers are making heavy use of salary support programs, often referred to as furlough schemes, that allow them to keep employees on the payroll while they await better times. In Germany, Europe’s largest economy, the labour agency pays at least 60 per cent of the salary of employees who are on reduced or zero hours.

The labour agency said Tuesday it paid out for 5.36 million people in June, the most recent month for which it has figures. That is down from a peak of 5.98 million in April, but far above the pre-crisis level in February of just 134,000. Germany has 83 million inhabitants. Germany won’t be scaling back that program soon. The governing coalition has agreed to allow employees to remain in it for up to 24 months rather than the regular 12.
Germany started easing coronavirus restrictions in late April, but some restrictions still remain and a recent increase in new infections has caused concern.

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